Any assessee who has tax payable and don’t file his/her Income Tax Return within the due date specified u/s 139(1) is liable to pay interest u/s 234A.
Meaning of Due Date U/s 139(1)
- Non Audit Cases : 31st July
- Audit Cases : 31st Oct,
Due to Covid 19 CBDT on 20th May 2021 extended the due dates for filing of Income Tax Return up to 30th Sep 2021 (Non Audit Cases) and 30th Nov 2021(Audit Cases) wide Circular No. 9 of 2021 Dated 20th May, 2021 or Order [F.No.225/49/2021-ITA-II].
Tax Payable = Tax On Total Income-TDS & Relief U/s 89/90/90A
So clear reading of section 234A with 139(1), an assessee is liable to pay interest u/s 234A if:
- he has tax payable and
- he don’t file his/her Income Tax Return up to 30th Sep 2021(Non Audit Case) or 30th Nov 2021(Audit Cases)
| However As per Circular No. 9 of 2021 Dated 20th May, 2021 or Order [F.No.225/49/2021-ITA-II] if assessee has tax payable exceeding Rs. 1,00,000 then for the purpose of Section 234A due date extension is not applicable on him and Interest will be charged from 1st Aug 2021(Non Audit Cases) or 1st Dec 2021(Audit Cases) as the case may be but he can file his return up to 30th Sep 2021 and 30th Nov 2021 as the case may be. |
Note : Interest will be charged up to date of filing of return
| Note : If assessee pay all outstanding tax demand after the due date but don’t file the return : In such case assessee will be liable to pay interest u/s 234A on tax payable till the date of filing the return |
For better understanding let’s take some illustrations
| Tax On Total Income = 241021 |
| Relief U/s 89/90/90A = 15000 |
| TDS = 25000 |
| Date Of Filing of Return = 02/08/2021 |
| INTEREST U/S 234A : |
| Amount on which interest to be calculated : 241021-15000-25000 = 201021 |
| Period 1ST Aug 2020 To 2nd Aug 2021 i.e. 1 month |
| Conclusion for point 2 : Since Tax Payable Rs 2,01,021 is more than Rs 1,00,000 So As per Circular No 9/2021 due date for calculating Interest U/s 234A will be 31st July so in this case interest will be charged from the Next Day of the original due date i.e. from 1st Aug 2021 |
____
| Tax On Total Income = 241021 |
| Relief U/s 89/90/90A = 15000 |
| TDS = 25000 |
| Date Of Filing of Return = 2/08/2021 |
| Self-Assessment Tax Paid On 01st Aug 2021 = 203027 |
| INTEREST U/S 234A : |
| Amount on which interest to be calculated : 241021-15000-25000 = 201021* |
| Period 1ST Aug 2021 To 2nd Aug 2021 i.e. 1 month |
| * Tax Paid after due date is not consider for the purpose of calculating interest u/s 234A |
| Conclusion for point 3 : Since Tax Payable Rs 201021 is more than Rs 100000 So As per Circular No. 9 of 2021 Dated 20th May, 2021 due date for calculating Interest U/s 234A will be 31st July so in this case interest will be charged from the Next Day of the original due date i.e. . from 1st Aug 2021 |
Conclusion :
| CASE I : TAX PAYABLE DOES NOT EXCEED RS 100000 | CASE II : TAX PAYABLE DOES EXCEED RS 100000 |
| INTEREST WILL BE CHARGED FROM 1st Oct 2021 OR 1st Dec 2021 AS THE CASE MAY BE TO DATE OF FILING OF RETURN | INTEREST WILL BE CHARGED FROM 1ST AUG 2021 OR 1ST NOV 2021 AS THE CASE MAY BE TO DATE OF FILING OF RETURN |
